Bitcoin has surprised everyone once again. Last week, things seemed very bearish for risk assets as the Russian invasion started, followed by a massive collapse of the global markets and Bitcoin.
Bitcoin’s price dropped rapidly, even breaking below the $36K level. However, demand came in, and the price was quickly pushed back above the mentioned support and rallied towards the $45K zone.
The 50-day moving average was impulsively broken to the upside on the daily time frame. The price is currently struggling with the 100-day moving average and amid the $45K area, and if it can break through these levels, the next significant resistance would be the $50K area.
On the other hand, if the price gets rejected at the current level, the 50-day moving average could act as the first and most probable support level.
Looking at the 4-hour time frame, price action appears more straightforward: The price was pushed above the $36K support, making the bearish leg a fake breakout.
After a few days of struggling in breaking above the $40K mark, massive demand came, and the price bulldozed past the $40K level creating giant bullish 4-hour green candles, reaching the $45K area of resistance at the time of writing.
Currently, bulls seem to be in total control. However, a short-term correction appears to be imminent as RSI ‘screams’ that bitcoin is over-bought on the short-term timeframe.
The $40K resistance, which is now turned into support, along with the 50-day moving average mentioned in the previous paragraph, would be substantial areas of support that would most likely turn into a higher low in case of a correction.
There have been $94 million in short position liquidations in the previous two days after the break of $39K, and the price follows up the higher trading zone ($40.8K – $44.4K).
Aggressive bears were liquidated on the previous breakthrough of $37.1K, and the market is presently trading around $44K – $45K.
For the last two weeks, funding rates have mainly stayed negative, with price absorbing selling liquidity in this range. As many investors who bet on the selling trend have been squeezed out of positions, they have shifted their focus to buying.
These liquidations are necessary for the market to temper down the leverage employed in derivatives.
Full-time on-chain Data Analyst and Python Programmer. Passionate about Bitcoin and DataVisualization. Contact: Twitter
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